US, EU Plan Computer Counterfeit Crackdown

By Reuters

Friday, 22 Feb 2008 | 9:58 AM ETReuters

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EU and U.S. senior officials said on Friday they would crack down on counterfeiting of computer components after they seized over 360,000 fake items in just two weeks in a joint operation at the end of last year.

Integrated circuits and computer components of over 40 trademarks including Intel , Cisco and Philips, worth more than $1.3 billion, were seized during the operation, the officials said.

"Traffickers and counterfeiters have become much more sophisticated ... They are no longer confining themselves to trafficking in some of the traditional goods we used to see them in, such as footwear or handbags," U.S. Customs and Border Protection Assistant Commissioner Dan Baldwin said.

infrastructure," Baldwin told reporters after talks with European Union counterparts in Brussels.

Integrated circuits are used in a wide range of products including computers, aircraft, cars and telecommunications. U.S. and EU officials said both sides of the Atlantic would work with importers to see how the fakes entered their markets, launch criminal investigations and take up the matter with China, where most of the fakes came from.

"We've identified a pretty significant problem, a fairly high risk for critical infrastructure," Baldwin said. "There will be criminal investigations."

Officials could not say at this stage if the importers knew they were trading counterfeit products and whether the problem came from a few factories or was more widespread.

But he warned the problem could affect all producers and said the industry needed to cooperate better to help them identify fakes.

John Pulford, a European Commission official responsible for customs risk management, said some fakes also came from Taiwan and Hong Kong and that most arrived by air, through couriers.

The first EU-U.S. customs operation took place in several German airports including Frankfurt and Leipzig, in France's Roissy-Charles-de-Gaulle airport and in Britain's Heathrow, as well as a number of hubs in the U.S., the officials said.

Pulford said it was only one of the many intellectual property rights problems the EU had with China.

According to the Organisation for Economic Co-operation and Development, the trade in pirated consumer goods has reached $200 billion a year, equivalent to 2 percent of world trade, with many fake items coming from China.